Fats are lipids that are soluble in organic solvents like alcohol, ether, and chloroform due to their nonpolar nature. The polar nature of water makes it incompatible with hydrophobic fat molecules, which is why fats and oils do not mix with water. Alcohol (ethanol) can dissolve fats because it has both polar and nonpolar regions, allowing it to interact with lipid molecules. This property is exploited in various extraction and purification processes.